Purchasing insurance gives us a sense comfort that if something goes wrong, we have financial support behind us. However, while you did your part by making costly premium payments, sometimes big insurance companies just don't want to pay up. They find excuses to deny claims or shortchange you.
When this happens, there are two things that you should consider. First, is the insurance company acting in bad faith? Second, is this a strategic way to gain an arbitrated settlement?
When insurance companies act in bad faith
Bad faith is just like it sounds. It's a handful of unethical practices that insurance companies use as excuses not to pay you or defend a claim against you. Things like lengthy investigations, saying your policy was canceled, offering only partial payment and many other tactics are designed to get you to walk away or take less money for your settlement. These bad faith ploys may also be a way to trigger an "arbitration clause" in your policy.
There are two types of arbitration clauses
In Oklahoma, there are two basic types of arbitration clauses, binding and non-binding. Insurance carriers are allowed to include either in the policies they sell.
- Non-binding arbitration: If you are unable to agree on a settlement amount, you or the insurance carrier can trigger this option. In Oklahoma, you have three months to come to terms. After that, your attorney may need to bring an action in court.
- Binding arbitration: In some respects, binding arbitration creates an incentive to deny claims and low-ball you. The insurance company knows that a neutral arbitrator will make the final decision, and it will have an opportunity to argue why you don't deserve full compensation. Arbitrators tend to seek a middle ground between your position and the company's low offer or denial. This can be a losing proposition for you.
The way to fight back against these wrongful practices is to follow these tips:
- Make certain to follow the proper claim-filing process.
- Keep a record of all of your interactions with the carrier and its representatives.
- Most importantly, get everything in writing.
If you can show the company acted unethically, then your attorney may be able to file a bad faith lawsuit even when an arbitrator already made a decision. If you are able to prove bad faith, the court may award you additional damages beyond your initial loss.
Residential and commercial property owners in Oklahoma pay some of the highest insurance premiums in the nation. When you suffer a loss, it's only fair that the insurance company compensate you properly. If your carrier isn't treating you fairly, contact an experienced insurance attorney from the law offices of Mansell, Engel & Cole.